In settlement negotiations, what does the term 'demand' refer to?

The term 'demand' in settlement negotiations specifically refers to a request made by the claimant for payment or repairs. When a claimant has experienced a loss or injury, they typically present a demand to the insurance company, outlining the specifics of their situation, the damages incurred, and the compensation they are seeking. This demand serves as a formal initiation of negotiations and sets the stage for discussions on settlement amounts and terms.

Understanding this term is crucial in the context of claims processing because it reflects the claimant's first step in attempting to resolve their claim. The adjuster, on the other hand, will review the demand carefully and may respond with a counter-offer, but the initial communication from the claimant is what constitutes the 'demand'. This process of negotiation is essential in reaching an agreeable settlement between the parties involved.